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Following your money
Bahamas offers varied attractions for investors
Tourists have long been attracted to The Bahamas for its crystal-clear waters and sun-kissed beaches. Investors and financial services professionals, on the other hand, have long been attracted to the archipelago because of its low-tax regime and sound legislative framework. An increasing number of wealthy individuals, however, are realizing that these two enticements are not mutually exclusive and are relocating to these shores to “follow their money.”
Benno Raëber, principal of Swiss-based firm Prime Advisory Group, which provides risk management and strategic insurance planning for high-net-worth and ultra-high-net-worth clients, and his wife and two children moved to Nassau from Switzerland a year ago. “We picked The Bahamas to do business mostly due to its proximity to the US,” Raëber explains, noting that The Bahamas’ branch of his firm deals mainly with US clients. “The perception of The Bahamas in the US is a positive one overall. It was a very easy decision. You can establish a bona fide business here. We can hire people who are local or from abroad. It is also well positioned between markets. It is in an ideal time zone, and there are direct flights to the US and Europe. It is the perfect Monte Carlo of the Caribbean.”
Cindy Sweeting, president at Templeton Global Advisors Ltd, is another professional who chose to come to The Bahamas for both professional and personal reasons.
“We decided to come to The Bahamas to have a family,” says the mother of two, who also manages investor portfolios for Templeton collectively worth around $45 billion. “It’s a great place to bring up a young family. You get all the benefits of being on a beautiful island, while at the same time you can have a very challenging career. It’s a really good trade-off.”
Benefiting The Bahamas
The advantages of having the likes of Sweeting and Raëber set up their homes and businesses in the jurisdiction is manifold for The Bahamas. The economic benefits and potential for business growth that can be derived once an investor, retiree, philanthropist, entrepreneur or other high-net-worth individual chooses the jurisdiction are enormous. Investors tend to look at who is operating in an area before choosing to do the same, and the more high-profile service providers such as Templeton that an offshore environment has, the more investors it is likely to attract. These professionals also bring in more high-calibre clientele, which in turn attracts more wealth.
Secondary benefits include the income generated from the relocation of such individuals to the islands. Exclusive communities, such as Lyford Cay on New Providence, account for some of the most expensive real estate in The Bahamas and predominantly cater to expats. These communities provide steady employment for domestic service providers, property agents and other local businesses.
According to a report by the Lyford Cay Property Owners Association, the wealthy gated community was responsible for contributing $209 million–or around 2.4 per cent–of the gross domestic product (GDP) of The Bahamas in 2008.
Increasing attractiveness
For the powers that be in The Bahamas, the key to attracting this type of resident is to facilitate the ease of which foreign investors can make their home here. With the introduction of a streamlined application process for Economic Permanent Residency (EPR), the ability for individuals to work and live in The Bahamas could become even easier and more attractive.
Towards the end of last year, the Bahamas Financial Services Board’s (BFSB) Working Group on Immigration put before the government its recommendations for the modernization of the permanent residency application process designed to provide greater transparency, boost efficiency and improve the overall competitiveness of The Bahamas.
“A predictable and user-friendly EPR application process, combined with the country’s physical resources and infrastructure, will enhance The Bahamas’ environment as a location for individuals and family offices, as well as for more institutions, to consider establishing subsidiary operations in the country,” says Bruno Roberts, director at The Private Trust Corp, deputy chairman of the Association of International Banks and Trust Companies and member of the BFSB working group.
According to Roberts, the government maintains a flexible immigration policy suited to the needs of international firms, individuals and families. The existing investment threshold for economic permanent residence, for example, is $500,000 on a residence. Permanent residency with the right to work in one’s own business is usually suited to the individual with a family office or one who simply wants to manage investments or a business that doesn’t interact with the Bahamian economy. This status means an individual automatically qualifies for the right to work in The Bahamas.
Perfect location
Roberts sees an improved EPR application process as being another string to The Bahamas’ bow, “as more and more individuals have chosen to ‘follow their money’ with respect to where they live and work,” he says. “The Bahamas has become the preferred choice for many who have adopted this way of life.”
He goes on to cite the availability of professional services, office space and support facilities as reasons why The Bahamas is in an enviably strong position compared with many of its regional and global competitors.
Roberts also echoes Raëber’s sentiments by highlighting the advantage of The Bahamas’ proximity to the US, as well as Central and South America, which puts it in a strong position to serve both traditional and emerging markets.
Travel connections with North America are reliable, with commercial airlines offering daily and frequent services to and from Miami (several times a day), Atlanta, New York, Chicago, Boston and many other US cities, as well as Toronto, Canada. Europe is also within easy reach, with regular flights to London and Paris.
As Roberts says: “Very few competitive jurisdictions can claim, or duplicate, the business and lifestyle combination that exists naturally in The Bahamas.”
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WBN10 - Bus_FollowMoney
Following your money
Bahamas offers varied attractions for investors
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